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• Freight rates in cargo transport showed a decline in the first half year 2023. A main reason is the normalisation of water levels. Dry bulk spot market prices in particular experienced a downward trend, reflecting the end of the coal boom in dry cargo transport and the end of the low-water period.
• Fuel prices in IWT also declined, following the decrease in oil prices. The reasons were mainly demand-driven, as the disruptions in trade and transport created a downward movement in oil and fuel demand. The outlook for fuel prices for the year 2024 points to a level of around 80 Euro per 100 litres.

 

WATERSIDE GOODS HANDLING IN MAIN UPPER RHINE PORTS

  • Monthly data for waterside goods handling in Upper Rhine ports show that cargo handling and related transport demand on the Rhine saw a downward trend in the first half year of 2023.
  • This downward trend reflects the overall deterioration of economic conditions in 2023. The Russian war against Ukraine led to shortages in energy supply, strong price increases in the economy, logistical disturbances and a decline in industrial production, trade and overall transport demand. In the wake of this, cargo handling in inland ports and transport activity on inland waterways were reduced (see also chapter 1).
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    FIGURE 1: MONTHLY WATERSIDE GOODS HANDLING IN MAIN UPPER RHINE PORTS (IN MILLION TONNES)

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    Source: CCNR analysis based on data provided by the ports.
     
     

FREIGHT RATES IN THE RHINE REGION3

  • In the Amsterdam-Rotterdam-Antwerp (ARA) Rhine traffic of liquid goods, spot market freight rates experienced a high degree of volatility between mid-2022 and mid-2023. The main reason was the low water period in summer 2022. In the first half of 2023, freight rates normalised in parallel with the normalisation of navigation conditions.
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    FIGURE 2: SPOT MARKET FREIGHT RATE EVOLUTION FOR GASOIL FROM THE ARA REGION TO RHINE DESTINATIONS (INDEX 2015 = 100)


    Source: CCNR calculation based on Insights Global
    * PJK collects spot market freight rates (in Euro per tonne) for ARA-Rhine trade of liquid bulk. The CCNR transforms these values into an index with base year 2015.
    Lower Rhine: Duisburg, Cologne. Upper Rhine: Karlsruhe, Basel. Main: Frankfurt/Main

     

  • Statistics Netherlands (CBS) collects freight rate data from a panel of Dutch IWT companies. These data are studied twice a quarter and include fuel and low water surcharges.
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    FIGURE 3: FREIGHT RATE EVOLUTION PER QUARTER FOR DUTCH IWT COMPANIES ACCORDING TO MARKET SEGMENT (INDEX 2015 = 100, QUARTERLY DATA)


    Source: Centraal Bureau voor de Statistiek (Binnenvaartdiensten; prijsindex)
     

  • The dry bulk spot market index rose steeply in summer 2022 but then decreased continuously in the following quarters. The normalisation of water levels, the end of the boom in coal transport and the general economic recession can all explain this development (see chapter 1).
  • Hence, by the second quarter of 2023, the gap between dry bulk spot market and dry bulk contract prices, that had opened in 2021 and in 2022, was closed.
  • The decline in the container freight rate index in 2023 reflects the deterioration in containerised trade, maritime container transport and in inland waterway container transport (see chapter 1, figure 4).
  • In addition, lower coal volumes also result in more vessels available for container transport. This rise in fleet capacity leads to lower freight rates in container transport.

 
 

FUEL COST EVOLUTION

  • In the second quarter of 2020 fuel prices were at their lowest level since 2009 due to Covid-19. During the recovery from Covid-19, as well as during the on-going Russian war of aggression against Ukraine, they rose to their highest level since the beginning of 2006 over the course of two years. Between mid-2021 and mid-2022, crude oil prices, together with fuel prices in inland navigation, roughly doubled. Between mid-2022 and mid-2023, oil prices and fuel prices in IWT subsided. The reasons were mainly demand-driven, as the disruptions in trade and transport created a downward movement in oil and fuel demand.
  • In the following graph, the curves for the oil price and for the fuel or gasoil price are roughly at the same level, but it should be noted that the oil price is given in Euro per barrel (= 159 litres), while the fuel prices are given in Euro per 100 litres. Fuel prices are thus higher than crude oil prices in absolute terms.
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    FIGURE 4: AVERAGE FUEL PRICES IN IWT AND BRENT CRUDE OIL PRICES INCLUDING FORECAST

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    Sources: Insights Global (fuel price based on gasoil bunker prices observed on a daily basis in Northwest Europe), US Energy Information Administration (oil price), Federal Reserve Economic Data (historical exchange rate US-dollar/Euro)
    1 barrel (bbl) = 159 litres

     

  • The graph shows a very close correlation between fuel prices in inland navigation (gas oil prices) and oil prices, which serves as a basis for forecasting fuel prices (using oil price forecasts).
  • The IMF oil price outlook indicates a stable oil price in 2024. This outlook would imply that fuel prices will settle on a level of around 80 Euro per 100 litre in 2024. The further geopolitical course will be decisive for the forecast horizon, especially with regard to the Russian war of aggression against Ukraine and the war in the Near East. Escalations and de-escalations of these conflicts would have an influence on the price development of crude oil and fuels.